Brief Exercise 8-16 (Algo) LIFO liquidation [LO8-6] Esquire Incorporated uses the LIFO method to report its inventory. Inventory at the beginning of the year was $780,000 (39,000 units at $20 each). During the year, 118,000 units were purchased, all at the same price of $29 per unit. 121,000 units were sold during the year. Assuming an income tax rate of 25%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements? LIFO liquidation profit (loss)

Brief Exercise 8-16 (Algo) LIFO liquidation [LO8-6] Esquire Incorporated uses the LIFO method to report its inventory. Inventory at the beginning of the year was $780,000 (39,000 units at $20 each). During the year, 118,000 units were purchased, all at the same price of $29 per unit. 121,000 units were sold during the year. Assuming an income tax rate of 25%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements? LIFO liquidation profit (loss)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 9P: LIFO Liquidation Profit Hammond Company adopted LIFO when it was formed on January 1, 2017. Since...

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LIFO Layer Liquidations and Net Income.The following information is taken from the annual report of The Claremont Corporation: (in millions) Year 2 Year 1 Net income before tax $368 $24 The company uses the LIFO method to value its inventory. In addition, the footnotes to the company's annual report revealed that, during Year 2 and Year 1, inventory usage resulted in liquidations of LIFO inventory quantities, and the effect of these liquidations was to reduce the cost of goods sold by $28 million and $6 million in Year 2 and Year 1, respectively. Calculate the company's net income before tax assuming that the LIFO inventory liquidations had not occurred. Year 2 Year 1 Restated net income Answer Answer
LIFO Layer Liquidations and Net Income.The following information is taken from the annual report of The Claremont Corporation: (in millions) Year 2 Year 1 Net income before tax $375 $29 The company uses the LIFO method to value its inventory. In addition, the footnotes to the company's annual report revealed that, during Year 2 and Year 1, inventory usage resulted in liquidations of LIFO inventory quantities, and the effect of these liquidations was to reduce the cost of goods sold by $28 million and $6 million in Year 2 and Year 1, respectively. Calculate the company's net income before tax assuming that the LIFO inventory liquidations had not occurred. Year 2 Year 1 Restated net income
Ma3. Hall Inc. has beginning inventory of 100,000 units (cost of $15 per unit) accounted for using the LIFO inventory method. During the year, the company sold more items than purchased, causing the ending inventory balance to drop to 65,000 units. Assuming a tax rate of 25%, and a current replacement cost of inventory of $28 per unit, what is the LIFO liquidation effect on after-tax income? Select one: a. $341,250 b. $455,000 c. $633,750 d. $113,750
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